Jargon buster: social investment-readiness – what does it mean?

Azlina Bulmer, programmes & development manager at Charity Bank makes sense of social investment-readiness and funding opportunities for charities and social enterprises.

The gap between social investment and the voluntary sector is starting to be bridged by new initiatives and I was thrilled to see, for example, Access The Foundation for Social Investment announce it will help to make investment available to small and medium-sized voluntary organisations.

If you’re working in this landscape of emerging funding options the jargon can sometimes stand in the way of pursuing them. Take ‘investment-readiness’ for example, a process that potentially presents a fantastic opportunity for your organisation. What exactly does it mean?

Social investment and investment-readiness

  • Social investment is finance provided to voluntary, community and social enterprise (VCSE) organisations which investors expect to be returned, and that is designed to have a social value.
  • Investment-readiness, or becoming investment-ready, is the process of preparing your organisation to apply for social investment or a loan. An investment-ready organisation will have the resources to identify, apply for, and secure investment or loans.

Credible business plans

Becoming investment-ready requires charities and social enterprises to refine business practices, governance structures and management teams to attract investment.

It means carrying out thorough financial modelling, and detailed market research, to produce credible business plans that stand up to investor scrutiny. Imagine this process as constructing a bridge between organisations and social investment.

Investment-ready tips

To prepare for investment or loans an organisation requires:

  • strong leadership
  • business planning
  • robust finances
  • good governance
  • comprehensive policies and procedures.

Getting started

Bear in mind that each organisation has different requirements and will need different levels of support – there is no one size fits all option. For many, investment-readiness is a relatively new concept and many organisations will require some support.

How much work is this?

Becoming investment-ready may require a lot of additional work. But the process will make your organisation more resilient and sustainable. Whether or not you decide to apply for investment, by becoming investment-ready you will have more options, and be in a position to make informed decisions about financing.

Links to further information

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